Last update on 2024-06-05

Vivendi (VVU.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Piotroski F-Score analysis of Vivendi (VVU.DE) for 2023 reveals a final score of 7/9, indicating strong financial health based on profitability, liquidity, and leverage.

Short Analysis - Piotroski Score: 7

We're running Vivendi (VVU.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score is a number between 0 to 9 that indicates the strength of a company's financial situation based on 9 criteria related to profitability, liquidity, and operational efficiency. Vivendi (VVU.DE) scored a 7 out of 9 on this scale. The analysis covers net income, cash flow, return on assets, operating cash flow vs. net income, leverage, current ratio, outstanding shares, gross margin, and asset turnover. The analysis showed that Vivendi has strong profitability with positive net income and cash flow from operations. However, liquidity is a concern with a declining current ratio, and leverage has increased. Operational metrics like gross margin and asset turnover are improving, indicating efficiency. Overall, the score reflects decent financial health, with room for improvement in managing liquidity and leverage.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 7, Vivendi (VVU.DE) shows signs of being a relatively strong and potentially undervalued investment. The company is profitable and its operational efficiency is improving. However, investors should be cautious due to the declining current ratio and increased leverage, which suggest some financial stability concerns. Overall, it could be worth looking into Vivendi further if you are particularly interested in companies with strong profitability but be mindful of evaluating its liquidity risks.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Vivendi (VVU.DE)

Company has a positive net income?

The criterion checks if Vivendi's net income for a given year, in this case, 2023, is positive. Net income is a crucial indicator of profitability.

In 2023, Vivendi reported a net income of €405 million, which is positive. Over the last 20 years, Vivendi has shown volatile net income figures, including significant dips in 2003 and 2020, as well as an exceptional surge in 2021 with €24.69 billion. The positive net income in 2023, although relatively moderate compared to high peaks, still marks a recovery from the previous year's loss of €1.01 billion. Considering the historical data, a positive net income in 2023 warrants adding 1 point for this criterion, reflecting a good financial health trend.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates whether the company is generating sufficient cash to sustain and expand its operations. It reflects the actual cash inflow from operating activities.

The Cash Flow from Operations for Vivendi in 2023 is €951 million, which is positive. Hence, we assign 1 point for this criterion. This indicates that Vivendi has managed to generate enough cash from its regular business operations in 2023. However, when comparing this figure to historical data, 2023 has one of the lowest CFOs in the last two decades, with a peak of €7,352 million in 2009. The decreasing trend in CFO over the years could be a cautionary signal indicating potential challenges in maintaining cash flow levels. Therefore, while the criterion is met, the significant decline over a 20-year horizon may warrant a deeper analysis.

Return on Assets (ROA) are growing?

Change in ROA (Return on Assets). This analyzes how well the company is generating profit from its assets compared to the previous year. A rising ROA indicates improving profitability.

Vivendi's ROA increased from -0.0312 in 2022 to 0.0116 in 2023, yielding an increase of 0.0428. Given this significant shift, we can infer Vivendi's profitability is improving, adding 1 point to our analysis per the Piotroski criterion. However, relative to the industry median ROA which showcased figures much higher, above 0.4 for over two decades, Vivendi's current ROA is still underwhelming. It's crucial that even with this positive sign, the company maintains efforts to consistently close the gap to the industry norms.

Operating Cashflow are higher than Netincome?

Profitability: The operating cash flow should be higher than the net income. This means the company generates more cash than its income, indicating strong earnings quality.

In 2023, Vivendi (VVU.DE) reported an operating cash flow of €951 million, significantly higher than its net income of €405 million. This provides a clear indication that Vivendi is generating robust cash flows from its operational activities, overshadowing its net income. Such a disparity is often viewed positively, highlighting the firm's ability to convert its revenue effectively into available cash. Therefore, based on this criterion, Vivendi scores a point.

Liquidity of Vivendi (VVU.DE)

Leverage is declining?

Leverage indicates the amount of debt used to finance a firm's assets and is essential for understanding financial risk.

Upon examining Vivendi's leverage ratio, it increased from 0.108 in 2022 to 0.1162 in 2023, indicating a rise in financial leverage. This increase results in zero points for the Piotroski score concerning this criterion, since higher leverage increases financial risk. Over the last 20 years, the leverage trend has fluctuated, peaking at 0.2227 in 2011 and hitting its lowest at 0.0445 in 2015. The recent rise suggests caution, although current levels are still below historical peaks and maintain a relatively stable range. This indicates that while the increase in leverage is not ideal, it is still manageable within a longer-term perspective.

Current Ratio is growing?

The current ratio is a measure of a company's ability to pay short-term obligations with short-term assets. It is important because it reflects liquidity.

The current ratio for Vivendi in 2023 is 0.7628, a decrease from 1.1095 in 2022. This indicates a deterioration in Vivendi's ability to cover short-term liabilities with short-term assets. Compared to the industry's median current ratio of 1.5175 in 2023, Vivendi appears less liquid, potentially signaling financial instability. Thus, no points are awarded.

Number of shares not diluted?

Change in shares outstanding involves examining the number of shares a company has over multiple periods.

For Vivendi (VVU.DE), the outstanding shares decreased from 1,031,700,000 in 2022 to 1,024,600,000 in 2023. This reduction signifies a positive trend from a Piotroski perspective, rewarding the company with 1 point. It is important to look at the historical data: over the last 20 years, exceptional reductions were observed, such as in 2020-2021 and 2021-2022. Continuing share reduction can imply effective capital management, reducing dilution risk for existing shareholders.

Operating of Vivendi (VVU.DE)

Cross Margin is growing?

Gross Margin examines the cost-effectiveness of a company's production process and efficiency in managing its production costs.

Vivendi's Gross Margin has risen from 0.4423 in 2022 to 0.4583 in 2023, an increase of approximately 3.6%. This uptrend is a positive indicator and should garner a point in the Piotroski Score. This upward movement reflects improved cost management and operational efficiency. Matches with the last 20 years data, where except for a dip in 2013–2017, Vivendi’s Gross Margin has generally been near or above the industry median. In 2023, the industry median Gross Margin stands at 0.4493. Vivendi surpasses this median, indicating its strong competitive position in the industry. The company earns 1 point for demonstrating this efficiency.

Asset Turnover Ratio is growing?

Explain the criterion for Vivendi (VVU.DE) and why it is important to consider

The asset turnover ratio is a financial metric that measures the efficiency of a company's use of its assets to generate sales revenue. Essentially, it indicates how well Vivendi is utilizing its asset base to support its top-line growth, which is critical for understanding operational efficiency. An upward trend in asset turnover is generally a positive sign, suggesting that the company is becoming better at generating sales from its asset base.